Monthly Archives: May 2025

GK Strategy in Conversation with Steve Brine and Richard Meddings

GK Strategy was pleased to host former Chair of NHS England Richard Meddings and former health minister and Chair of the Health and Social Care Committee Steve Brine for an ‘in conversation with’ discussion on Thursday 15 May to examine some of the challenges facing the government, the Department of Health and Social Care and the NHS 10 months into Labour’s term in office.

Meddings and Brine took a deep dive into a range of issues affecting the health and social care sector, exploring the implications for investors and service providers. From funding pressures to the abolition of NHS England, the discussion drew on our speakers’ extensive experience to evaluate the road ahead for the health system and the reforms the government will need to deliver to meet its ambitious policy objectives.

Much of the discussion focused on the NHS and the role of ICBs in a reformed health system following the announcement that NHS England would be abolished. There was agreement that health secretary Wes Streeting had received a tough inheritance, including mounting pressures on the health service and a poor fiscal climate making a significant injection of additional funding unlikely. The panellists highlighted the urgent need to redesign governance frameworks that better meet the demands of a modern health service.

Meddings and Brine spoke in detail about the role of technology in reforming the delivery of healthcare. They agreed there needs to be a steady stream of investment to maximise the increasing role AI will play in improving patient care and delivering efficiency savings within the NHS. The pair emphasised the need for Streeting to secure the ear of Chancellor of the Exchequer, Rachel Reeves, who they argued will need to prioritise health targets despite a constrained financial budget.

The two panellists agreed that reducing the elective care backlog and meeting the 18-week referral to treatment target was the key retail offer to voters at the general election and will be the main health priority for the government. This is despite wider initiatives that might have more significant long-term outcomes for the health of the UK’s population. Other short-term priorities for the NHS that were discussed included reducing the number of people in urgent care, increasing access to primary care, and improving cancer detection rates.

Towards the end of the session, the discussion shifted to the upcoming 10-Year Health Plan which will set out the government’s healthcare reforms in detail. Meddings and Brine agreed it is likely to prioritise prevention, the shift from hospital-based to community care and greater digital integration, which were the three ambitions put forward by Labour pre-election. The panellists highlighted that meaningful progress will depend on early intervention strategies and targeted investment, particularly in tackling obesity, cancer and mental health challenges.

For investors and stakeholders, the panel’s message was clear: steady investment in health, coupled with a pragmatic embrace of technology and AI presents a significant opportunity to reshape the delivery of healthcare at a time when demands on the NHS continues to rise.

Health, social care, and life sciences is one of the GK’s core sectors. GK supports a range of businesses and investors to navigate the political, policy and regulatory landscape and help them to realise their commercial objectives. Please get in touch if you would like to discuss the impact of politics and policy on your business or investment decisions.

Roundtable discussion: A collaborative and child-centred approach to children’s social care

In April 2025, Christie & Co, Compass Carter Osborne, and GK Strategy hosted a female-led roundtable discussion on the challenges in the children’s social care sector across England and Wales. Here are the key takeaways.

For a roundtable event held in April 2025, hosts Hannah Haines (Head of Healthcare Consultancy, Christie & Co), Michâela Deasy (Head of External Communications, Compass Carter Osborne) and Lizzie Wills (Senior Partner & Head of Private Equity, GK Strategy) were joined by some of the biggest female names in the UK children’s social care sector.

The roundtable brought together operators, lawyers, investors, and sector experts, all of whom share a passion for quality healthcare and for driving an increased awareness of the challenges faced by operators across the country.

Below are some of the key highlights from the discussion.

THE INTRODUCTION OF PROFIT-CAPPING IN CHILDREN’S SOCIAL CARE AND WHAT THIS MEANS FOR THE SECTOR

Overview

Ahead of last year’s election, Labour pledged to reform the children’s social care system to improve the outcomes of looked-after children and those in care, and to address the funding crisis in the system following years of local authority funding pressures.

As part of the King’s Speech in July 2024, the government announced its plans to introduce the Children’s Wellbeing and Schools Bill, which formed part of its legislative programme of over 40 new bills. One of the most controversial elements of the Children’s Wellbeing and Schools Bill was announced the following November; the ability of the government to intervene directly in the market to introduce a profit cap on providers.

Concerns about excess profit-making in the children’s social care sector are not new, and the sector has historically done a good job at engaging with the government about why the fees charged by the independent and private sectors are typically higher than those provided by local authorities. This includes the complexity of the placements provided, with the private and independent sector providing a higher proportion of placements for children with highly complex needs, often where they need additional therapeutic support, or one-to-one care. The private sector also takes a higher number of children who have already experienced several placement breakdowns in local authority provision. The ability of the sector to be able to make a level of profit allows it to reinvest in meeting quality standards, hiring and training staff, and delivering new settings, often at the request of local authorities who are struggling with high levels of demand.

The Government has been clear that it does not intend to introduce a profit cap immediately and will only do so if its broader package of measures is unsuccessful in tackling what it sees as ‘unacceptable profiteering’ and rebalancing the market. There will also be a detailed public consultation before anything is implemented, including discussions specifically with local authorities and providers.

If the profit cap is implemented in the future, providers will be required to submit an annual financial return to the government to enable their profit levels to be assessed. Again, details are limited in terms of what information will be included in these returns. Details will also be subject to consultation with final plans set out at a later date. Should enforcement action need to be taken against a provider, this will be in the form of fines, the maximum amounts of which are expected to be set out in the subsequent secondary legislation.

Views from around the room: What will profit capping mean for the sector?

The Government might say it’s not against profit making, just against ‘profiteering,’ and that the steps it is taking are necessary to address the latter. The consensus is that the government’s approach to having a profit cap as a backstop in the new legislation will be a useful tactic to encourage providers to reinvest their profits into delivering better outcomes for children and young people, despite the potential for causing short term uncertainty.

It might be comforting for providers to know that, if the Government does implement a profit cap, it is expected to take several years to go from ambition to delivery, given the complexities involved. Significant parts of the mechanism will need to be set out in secondary legislation, and many of the details that are yet to be ironed out will be controversial, including how profit will be determined for the cap, and if it will be per placement, per business or per setting (or indeed based on some other metric).

Banks are watching the sector closely, but invested funds (especially impact funds) have a continued interest. Investors that are likely to do well are those that are reinvesting profits back into the UK healthcare infrastructure. However, smaller organisations may struggle to scale due to dampened investor interest, raising questions about how they can demonstrate ROI to investors and build an investment case.

In its 2022 report on children’s social care in the UK, the CMA acknowledged that comparing costs in the sector was complicated by differences in the needs of children placed in different settings and variations in how costs are calculated and reported. Rather than focusing on profit, which loses sight of the child, participants at the roundtable agreed it should be based on the outcomes and progression of the child. It should be a partnership, with everyone working together.

This was echoed around the room, alongside the challenges in measuring outcomes using such methods as the BERRY approach which matches needs against costs. Every looked-after child undergoes reviews to ensure outcomes are measured. A universal framework for evaluating providers based on outcomes rather than profit was seen as a potential solution that government should consider. The sector is well placed to advise the government on how approaches to date have worked, and how they could be refined in future.

We have already seen changes in Wales through its Eliminate Agenda, whereby it became the first nation in the UK to legislate to prevent profit-making by private companies in relation to children’s residential and foster care services by 2030. The Health and Social Care (Wales) Act 2025 received Royal Assent in March 2025 and mandates that children’s residential and foster care services be provided exclusively by local authorities, charities, or not-for-profit organisations.

Wales can serve as a case study for England. The sector in Wales is very prescriptive about what can and can’t be done by providers. The Welsh Government is now considering the role cooperatives could play in the delivery of services and they’ve pushed back the final stage in the roll-out of the plan by three years (to 2030) A lot of what is happening is political and their agenda is quite clear, so England would be wise to keep a watchful eye on what is happening over the border.

What action should be taken?

The consensus around the table was that we need to evidence the positive outcomes the private and independent sector is delivering for children and young people, to counter negative perceptions around profit-making. There was agreement that the sector has historically not been sufficiently vocal in making this case, and demonstrating the excellent outcomes it supports across a group of vulnerable individuals and their families.
The focus should be on positive outcomes for children, not profits – so providers, parents, the government, and the media all need to work together to lift up the sector and highlight the amazing work that it does for each child, keeping in mind that the outcomes for each will be different.
There is a continuing lack of constructive dialogue between some Local Authorities and operators throughout the health and social care space. The sector must focus on demonstrating positive outcomes and maintaining strong relationships with local authorities to navigate the ongoing political changes.
Any new policy must be outcomes-focused, fit for purpose, workable in practice and designed and implemented after full consultation with the sector.

INVESTMENT IN THE SECTOR AND ONGOING COMMUNICATION ISSUES IMPACTING PROGRESSION

Views from around the room: What could the children’s services sector be doing to improve communications between the Government and operators?

The landscape of children’s services is marked by a myriad of challenges and opportunities, particularly in the context of collaboration, funding, and policy implementation. Despite numerous operators striving to collaborate and communicate effectively, the sector is often met with negativity, largely due to underfunded government spending across all areas.

A significant issue is the lack of focus on the child. There is insufficient engagement from government with the private sector, and the narrative needs to shift to place the child at the centre of all decisions. When the child’s needs are prioritised, quality naturally follows. However, there is an imbalance as each child and business is different, and policies are often rushed through without adequate consultation with operators.

An immediate concern is the sustainability of providers amidst declining fostering rates and increasing care needs. Many smaller businesses are at risk of not surviving due to these pressures. Perceptions that mainstream education settings continue to struggle to support those with lower-end spectrum needs is driving an increasing number of parents who feel they are left with no other option but to seek Education, Health and Care Plans (EHCPs) and external support, resulting in an increasing demand for specialist support on the lower end of the scale. The government’s current policy agenda around mainstreaming and inclusivity for children with less complex SEND is an attempt to address the ‘drift’ towards specialist schools.

It was also highlighted that, amidst funding challenges, local authorities are focusing on immediate budgets rather than long-term savings and the positive impact on the child that could be achieved through early intervention. The debate around profiteering stresses that higher margins do not necessarily equate to higher quality, nor do lower margins imply lower quality. The goal should be to support the child’s needs, improve outcomes, and subsequently lower the costs of provision. However, the primary challenge remains budgetary and funding constraints faced by local authorities.

Bespoke solutions, such as tuition hubs for children close to re-entering mainstream education are essential. These hubs can provide tailored support to ensure a smooth transition back into the school environment.

What action should be taken?

The sector must focus on child-centric approaches, effective collaboration, and innovative solutions to navigate the current challenges. By prioritising the child’s needs and demonstrating positive outcomes, the sector can build a stronger case for adequate funding and support. As a provider, if you can demonstrate where money is being reinvested to drive up quality and outcomes, that’s a useful and constructive addition.

LEADERSHIP AND AN EFFECTIVE MANAGEMENT STRUCTURE IN HEALTHCARE BUSINESSES

As demand for high-quality, specialist care continues to grow, how can management navigate the complex environment, mitigate risk, secure investment, and ensure sustainability and innovation within the sector?

Investors in this space are showing a notable shift in appetite. While continuing to focus on identifying future leaders from within the sector – whether for CEO, CFO, or CPO roles – they are increasingly looking beyond traditional industry boundaries to source talent. This reflects a growing recognition of the need for financial and operational strategies to evolve with rising demands, including revenue diversification.

Take the Chief People Officer (CPO) role, for example. The CPO’s mandate is to foster a culture that attracts and retains a diverse team – one that is calm, focused, driven, and open to embracing technology, with a strong understanding of risk and quality outcomes.

Similarly, today’s CEO must be multifaceted, a strategic leader with deep experience in execution, a keen understanding of risk, and a strong focus on quality. They must leverage technology that delivers real value, foster a purpose-driven culture, understand competitors and market dynamics, and prioritise meaningful metrics and KPIs. Above all, they must lead with empathy and drive a people-first agenda.

Views from around the room: What does strong leadership look like to you?

Not losing sight of why you’re there creates a robust culture
Trust. Being able to challenge one another at every level is healthy and creates a stronger business
Need a passion for the sector itself and an understanding of what internal and external drivers
Someone who has risen through the ranks, who is an inspiration to others and brings about a strong, positive culture
While knowledge of the sector is beneficial, it’s not necessarily the case that the best talent is a sector specialist. Sometimes it’s about looking more broadly at the talent out there that could be great at driving leadership
Someone with an inherent entrepreneurial quality who can find a solution to a challenging landscape without diluting what the business is set to achieve
A leader who takes real-life stories back to the boardroom, reminding the corporate team that it’s not just about the numbers, it’s about bringing the personal element back

To find out more about the changing landscape of the children’s social care sector, or to join the team’s next roundtable event, contact:

Lizzie Wills: lizzie.wills@gkstrategy.com

Hannah Haines: hannah.haines@christie.com

Michâela Deasy: michaela@compasscarterosborne.com

Local Elections 2025

The main takeaway from May 2025’s local elections is that Reform UK is now firmly placed among the top players in Westminster. Despite only recently professionalising and mobilising, the party has turned a sea of established Conservative councils a bright turquoise blue. The Conservatives are now rapidly losing electoral support and Reform UK’s Leader Nigel Farage has declared his party the main opposition to the government.

Reform UK’s sharp rise has been evident since last year’s general election. Translating its position in the opinion polls into electoral success has, however, previously been inhibited by the UK’s first-past-the-post voting system. This saw the party win only five seats in last year’s general election despite receiving 14% of the national vote share. Reform UK has since showed no signs of slowing down, with opinion polls increasingly in their favour in the lead up to this month’s local elections. The party was undoubtedly the big winner of the contest, securing 677 council seats, demonstrating its credentials as a serious challenger to the two main parties.

The Conservatives have had the toughest result of all the parties, losing 674 seats overall. Of the 23 councils up for election, they had been in control of 16. Reform UK now control ten, the Liberal Democrats have the keys to three, and a further ten have no overall party control. This is likely to raise questions over Kemi Badenoch’s future as leader of the Conservative Party, although a formal challenge is unlikely to materialise given Conservative MPs’ appetite for stability after a recent series of damaging leadership changes. Conservative headquarters will now have to ensure its strategy is bulletproof if it hopes to fend off the threat of Reform UK and meaningfully challenge the incumbent Labour government at the next general election.

It was not a successful result for the government either, with Labour losing 187 seats. The Party’s only glimmer of hope can come from returning incumbent mayors in Doncaster, North Tyneside and West of England. While Labour had a smaller pool of seats to defend than the Conservatives, meaning its losses were less severe, keeping this trio of local authorities will be hard to celebrate considering Reform UK came a close second in all of them. With a brand new Reform UK MP overturning Labour’s majority of 14,696 in Runcorn and Helsby by a mere six votes, there is clearly serious dissatisfaction with the government’s direction of travel, undoubtedly causing a serious headache for No.10.

Two truths emerged from the first real test of the government: Labour must pull through on delivery for the public if it hopes to keep its position in power come the next general election, and the Conservatives need to figure out how to remain as the main opposition party with Reform UK continuing to gather momentum at pace.

Join us on Thursday 8 May at 9am for our Post Local Elections Webinar with former Treasury Minister Rt Hon David Laws and JL Partners Director Guy Miscampbell to discuss the local election results and what they mean for national politics.

You can sign up using this link.

Milking it! Extending the sugar tax for public health and economic gain

This week the government launched a consultation on its plans to tighten the sugar levy. This follows last year’s review of the effectiveness of the SDIL to date. Chancellor Rachel Reeves strongly hinted that the government was considering broadening the scope of the levy at October’s autumn budget and the consultation document does just that.

The government’s proposals include reducing the minimum sugar content level at which the levy applies from 5g to 4g; removing the exemption for milk-based drinks; and removing the exemption for milk substitute drinks. This means milkshakes, pre-made coffees and many of your favourite fizzy drinks will be reformulated or face becoming taxable.

Initial analysis suggests that over 90% of milk-based products will be affected. Initially exempt because milk is a source of calcium for children, the government’s revised position is that any potential health benefits are outweighed by the negative impact of consuming high levels of sugar.

Although the contents of this consultation come as no surprise to those who have been closely following policymaking in this space, it does set the mood music for the upcoming national food strategy and signals a government unafraid to be heavy-handed when it comes to public health. Although the SDIL is widely considered to be a successful and effective policy intervention, the UK’s sugar consumption remains significantly above recommended levels, especially among children. By lowering the sugar thresholds and widening the scope of products, more soft drink producers will be forced to reformulate products or see their production costs increase. However businesses decide to act in response to changing regulations, the government hopes the result is a significant reduction in the nation’s consumption of sugar.

Obesity costs the NHS around £6.5 billion a year. NHS data shows a deeply concerning trend of rising childhood obesity. Almost 10% of children are now living with obesity by the time they start school and 24% of children have tooth decay by aged five thanks to excess sugar consumption. With obesity taking effect earlier in life, the associated costs for the NHS are set to soar to £9.7 billion by 2050. This is especially bad news for a government grappling with a challenging economic environment and acute pressures on public spending. But for Labour, it feels all the more personal because in the most deprived areas the prevalence of obesity can be almost 15% higher than in the least deprived ones – something that the last government’s food strategy picked up on. Tackling health inequality is a huge part of the government’s commitment to ensuring all children and young people have the same opportunities and start in life.

For industry, there is a fine balance to strike. Full resistance to public health reforms designed to improve the health of our children would leave a bad taste in consumers’ mouths. Developing and maintaining an open, constructive dialogue with government, including showcasing innovative reformulations, will be a far more effective approach. Framed in this way, industry will be able to better make the case that a proportionate approach to SDIL and wider public health reforms will deliver positive health and economic change.

Now is the time to engage. Those who can successfully demonstrate alignment with the government’s public health goals will be well-positioned for future discussions about the developing national food strategy, which will set the strategic direction of travel for the rest of this parliament and beyond. One thing is for sure, this is unlikely to be the last government intervention in the name of improving the nation’s health.

The consultation runs until 21 July. If you’d like to discuss contributing to it or the wider HFSS policy environment, please contact Lauren on lauren.atkins@gkstrategy.com.